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1. DEVRY ECON 545 Week 6 Course Project 2 Macroeconomic
Analysis (Situation B) NEW
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The Macroeconomic Paper tests your ability to apply economic principles to a
business decision considering the impact of macroeconomic variables. Select one
situation from the items outlined below: A to D. Complete the paper on the selected
situation as specified below. The completed paper is a professional report and is due
in Week 6 (260 Points). See the grading rubric at the end of this document. Be sure to
use the DeVry library to find data, and avoid questionable sources, such as
Wikipedia.
Each of the scenarios has a list of Macroeconomic areas you are to address, with
sources, in your answer. Briefly you are to research and show how these apply to
your scenario: GDP growth rate (20 points), the business cycle (30 points), fiscal
policy and level of unemployment (50 points), monetary policy and interest rates
(50 points), international trade (40 points), and demographics (20 points).
Situation A
Rick, your friend, runs a small manufacturing plant that produces parts for the auto
industry. Rick is thinking of expanding his operations to meet the increasing demand
from car manufacturers. Hearing of your taking this course in business economics,
he asks you for advice on how to go about making the expansion decision.
At first you are reluctant to give investment advice, but then you happen to read the
piece “U.S. Auto Sales Estimates Cut as Confidence Slows Rebound” on page 634 of the
textbook. You suddenly realize that Rick needs to take a number of macroeconomic
variables into consideration for the expansion decision. You decide to research the
economy in terms of GDP growth rate, interest rates, level of unemployment, the

2. business cycle, fiscal policy, monetary policy, international trade, and demographics.
You want to provide Rick with the most informed advice possible.
Situation B
Your neighbor Cindy wants to start a contracting business for installing solar panels.
She has heard of the cost savings that households and businesses can make each year
by installing solar panels on their roofs. Cindy has also heard of government
incentives for installing solar panels. Being concerned about the environment and
wishing to reduce pollution, Cindy thinks installing solar panels also serves a good
social purpose. But she does not want to risk her life savings on a venture that might
not succeed or become profitable enough. After hearing from you about taking this
course in business economics, she decides to ask you for advice.
At first you are hesitant to give investment advice. Then you read the piece “Postal
Service Considering Cutting 120,000 Jobs” on page 668 of the textbook. You realize
there are more pieces to the decision than Cindy is considering. You decide to
research the economy in terms of GDP growth rate, interest rates, level of
unemployment, the business cycle, fiscal policy, monetary policy, international
trade, and demographics. You want to provide Cindy with the most informed advice
possible.
Situation C
Cousin Edgar is always thinking of the next business idea. This time, he plans to
invest in buying four gas stations. He reckons American consumers have come to
accept the high gasoline prices, and estimates world prices for gasoline to increase
even further with high demand from India and China. Besides, Cousin Edgar thinks
he will make a good profit on the sale of convenience items at each station. But
before buying the gas stations, he decides to ask for your advice because you are
taking this course in business economics.
You happened to read the piece “Bank Lending Signals a Strengthening Economy” on
page 856 of the textbook. Cousin Edgar needs financing for his new business, but you
realize there are more macroeconomic factors he needs to consider in timing his
decision. You decide to research the economy in terms of GDP growth rate, interest
rates, level of unemployment, the business cycle, fiscal policy, monetary policy,
international trade, and demographics. You want to provide Cousin Edgar with the
most informed advice possible.
Situation D

3. After hearing of your taking this course in business economics, Uncle Dan has e-
mailed you asking for advice on his 100-acre corn farm. He mentioned how, after 30
years of growing corn, he wishes to leave that commodity’s market and enter a more
profitable market instead. He is thinking of subdividing his land and building homes
and shops. He reckons he could make a good profit by selling the homes and renting
the shops.
Before you can find time to answer Uncle Dan’s e-mail, you read the piece “Will the
Fed’s New Policies Revitalize the Housing Market?” on page 896 of the textbook.
Recognizing the costs and risks for Uncle Dan in making the switch, you decide to
research the economy in terms of GDP growth rate, interest rates, level of
unemployment, the business cycle, fiscal policy, monetary policy, international
trade, and demographics. You decide to educate yourself about macroeconomics so
that you can provide Uncle Dan with the most informed advice possible.
Macroeconomic Paper as a Professional Report
Your paper should be organized into five parts as listed below.
1. Title Page: Name, class, and date
2. Introduction to situation but do NOT copy the
scenario. Briefly summarize the situation and
identify the macroeconomic issue(s) to be decided
from the perspective of the organization.
3. Business Cycles, Unemployment, Inflation,
International - Comparative Advantage, Exchange
Rates, Trade, Etc., Monetary Policy and Interest
Rates, and Fiscal Policy and Unemployment Identify
the variables that are critical in addressing the
issue(s). Gather and present the relevant data on the
variables by searching the DeVry Online Library. Ask
a librarian for help if needed. Use in-text citation to
report the source(s) of the data. Graphs may be
included here.
4. Recommendations and Economic Justification
Formulate and present your recommendations for addressing the issue(s) based on
the relevant data and economic principles identified above. Justify your
recommendations in terms of the economic impact on those affected.

4. 5. References
List the full references for at least five sources alphabetically in APA format.